Single-family residence fix & flip investment.
Purchase price: $315,000
Cash invested: $38,000
Sale price: $450,000
This was an older home(1950's) that This was our 2nd property where we were still in the middle of our 1st property that had not been going very well and still was not.
What made you interested in investing in this type of deal?
My dad had always had some reall estate while we were growing up so I had the bug but not the know how evidenced by our 1st property expereince. We had a partner on the 1st deal and even though we were not sure to involve him on this property, I decided to move fwd with that partner again as well as 1 other partner/friend from church(not the RE broker). This property just seemed to have a lot of upside, about 2000 sf, on 2.3 acres, next to a popular public golf course and on a well traveled st.
How did you find this deal and how did you negotiate it?
a friend/Acquaintance of my from church who was/is a RE broker had been talking to me about for about 6 months. It turned out that another couple from our same church was getting a divorce so we were doing them a favor so it would not go to foreclosure.
How did you finance this deal?
regular mortgage, did not know there were other options
How did you add value to the deal?
New siding(added immediate curb appeal), removed old popcorn ceiling, re mudded walls, painted interior, cleaned, cleaned and then cleaned some more, added front deck, landscaped front & backyard,
What was the outcome?
Since being on the well traveled road we put an A frame on the roadside which brought a lot of lookers stopping by while doing the work especially once we completed the new siding on the front of the house which faced the road. One of them, a couple that owned a local electrical contracting company, wanted to buy it so he could run his business on the premise. We had a punch list of items still to complete & he asked how much we would sell it for if we discontinued the improvements.
Lessons learned? Challenges?
1) would not have included the partner form the 1st investment property. 2) would not have done a traditional mortgage, would have looked for private investor. 3) even though this worked out fairly well, I probably would have wanted to stay in a lower price point property with less acreage. 4) We did have a punch list which we created at the very beginning that we stuck to very closely. The only major deviation was adding the siding which was a huge plus! It exponentially added curb appeal!
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Not at this time.
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